Assicurazioni Generali S.p.a. · MIL:G

Assicurazioni Generali — H1 2014 Earnings Presentation

51 slides from Assicurazioni Generali's earnings presentation, Jul 31, 2014

  1. Slide 1: GENERALI GROUP 2014 First Half Results

    GENERALI GROUP 2014 First Half Results Please note that prior year’s figures have been restated throughout the whole presentation to reflect the new perimeter of the Group. Net income, Shareholders’ Equity, Solvency I, Life Value KPIs, Embedded Value, Economic Solvency are not adjusted for disposed

  2. Slide 2: Agenda

    2 Agenda - Business Update Page 3 Mario Greco – Group CEO - 2014 First Half Group Financials Page 10 Alberto Minali – Group CFO - Backup Page 33 © Generali July 31, 2014 2014 First Half Results

  3. Slide 3: I. Business Update

    3 Agenda I. Business Update Mario Greco – Group CEO © Generali July 31, 2014 2014 First Half Results

  4. Slide 4: The power of Discipline, Simplicity and Focus

    CEO – Business overview 4 The power of Discipline, Simplicity and Focus Turning the page to a new normal for Generali  All of the targets set out in the 2015 turnaround plan are either concluded or within sight: aiming to achieve remaining targets as soon as practicable  Our business now has solid

  5. Slide 5: A focus on profitability and cost savings

    CEO – Business overview 5 The power of Discipline, Simplicity and Focus A focus on profitability and cost savings Solid and continuous Great strides towards cost Solid net result despite improvement in operating profit savings goals detrimental one-off items Group operating profit P&C Expense Ratio

  6. Slide 6: Completion of asset disposals a year ahead of schedule

    CEO – Business overview Completion of asset disposals a year ahead of schedule Non-core asset disposal programme generated 18%pts of Solvency I capital Exit Disposal programme brings Closing Proceeds Solvency 1 Operation multiple multiple benefits Date (€ bn) impact (historic)  Completion of dispos

  7. Slide 7: Balance sheet strength restored

    CEO – Business overview 7 Balance sheet strength restored Solvency I ratio at target, and at highest level for a decade  Completion of disposal programme, retained earnings, and improved financial market conditions result in target being met one year early  Solvency I impact of the acquisition of

  8. Slide 8: The power of discipline, simplicity and focus

    CEO – Business overview 8 The power of discipline, simplicty and focus Continued focus on delivering operational excellence and reducing costs and debt Rapid delivery to complete remaining With our November investor day giving an targets insight into the potential of our group as we move to complete

  9. Slide 9: Our vision for Generali in 2015

    Our vision for Generali in 2015  Focused on core insurance  Superior customer acquisition business, with greater and retention; focus on retail contribution from P&C and affluent space  Stronger capital position and  Consistent technical excellence disciplined balance sheet and tight control man

  10. Slide 10: 2014 First Half Group Financials

    10 Agenda 2014 First Half Group Financials Alberto Minali – Group CFO - Profit & Loss and Balance Sheet Page 11 - Business review Page 19 © Generali July 31, 2014 2014 First Half Results

  11. Slide 11: 2014 First Half Group Financials

    11 Agenda 2014 First Half Group Financials Alberto Minali – Group CFO - Profit & Loss and Balance Sheet Page 11 - Business review Page 19 © Generali July 31, 2014 2014 First Half Results

  12. Slide 12: Key First Half 2014 financials at a glance

    CFO – Profit & Loss 12 Key First Half 2014 financials at a glance  Operating Result: Good development thanks to all business segments  Life: Increasing thanks to lower expenses and improved investment result. Strong increase in new business and net inflows, especially unit linked  P&C: Positive p

  13. Slide 13: Operating result by segment

    CFO – Profit & Loss 13 Operating result by segment (€ m) +9.5% 31 14 2,512 71 133 2,295 (32) 1H13 LIFE P&C FINANCIAL HOLDING EXP. CONS.AD 1H14 SERVICES 1H14 1,551 1,033 226 (197) (101) 1H13 1,481 900 195 (165) (116) D +4.8% +14.8% +15.8% +19.3% -12.3% © Generali July 31, 2014 2014 First Half Results

  14. Slide 14: From operating result to net profit

    CFO – Profit & Loss 14 From operating result to net profit Net income excluding discontinued operations, +12.5% Including: - € 190 m: Ingosstrakh impairment (€ m) Including: - € 70 m: VOBA amortization 2,512 Including: (74) - € 113 m: impact from BSI disposal (409) (170) 1,075 Including: - € 383 m:

  15. Slide 15: Shareholders' equity

    CFO – Balance Sheet 15 Shareholders’ equity Shareholders’ equity rollforward (€ m) Shareholders’ equity sensitivities (€ bn) +11.9% 2,420 1,075 22,125 19,778 (701) (447) Equities -30% -1.8 Interest rate +100 bps -2.9 SHAREHOLDERS' Δ AFS RESERVE 1H 2014 NET DIVIDEND OTHER SHAREHOLDERS EQUITY FY13 RES

  16. Slide 16: Solvency I

    CFO – Capital 16 Solvency I Solvency I rollforward (%)  Significant improvement of Solvency capital position driven by: Solvency I ratio sensitivities (%)  result of the period Total ratio  successful placement of subordinated bond 30.06.2014 162  financial market development Equities -30% 151 

  17. Slide 17: Group embedded value rollforward

    Balance sheet – Capitalisation & Leverage 17 Group embedded value rollforward Including - € 1.7 bn: decrease in interest rates (VIF and P&C liab) + € 0.7 bn: spread narrowing and increase in stock market 1,789 28,873 28,830 (900) (701) (145) Robust return on embedded value, mainly driven by Life NBV

  18. Slide 18: Economic solvency

    Balance sheet – Capitalisation & Leverage 18 Economic solvency Economic solvency rollforward (%)  The increase in available capital is driven by the new placement of subordinated bond  Good overall performance of financial markets support the increase of available capital  Capital requirement inc

  19. Slide 19: 2014 First Half Group Financials

    19 Agenda 2014 First Half Group Financials Alberto Minali – Group CFO - Profit & Loss and Balance Sheet Page 11 - Business Review Page 19 © Generali July 31, 2014 2014 First Half Results

  20. Slide 20: Life key financial indicators

    CFO – Life Insurance 20 Life key financial indicators (€ m) 1H13 1H14 LFL D 2Q13 2Q14 LFL D Gross written premiums 23,115 24,192 +5.4% 11,256 12,131 +8.5% Net inflows 4,935 5,926 +22.0% 2,125 3,037 +44.7% Life operating result 1,481 1,551 +4.8% 700 772 +10.3% Life operating ratio on 45 42 -3 26 26 0

  21. Slide 21: Life Operating result by driver

    CFO – Life Insurance 21 Life Operating result by driver  Improving thanks to increasing investment result and decreasing expense ratio  Technical margin lower due to policyholder share of lower expenses, and lower risk result +4.8% 154 1,551 1,481 35 (€ m) (118) 1H13 TECHNICAL MARGIN INVESTMENT RE

  22. Slide 22: Life inflows and technical reserves

    CFO – Life Insurance 22 Life inflows and technical reserves(1)  Sharp increase in net inflows (+ 22%) - Notable improvement in Italy and EMEA - Decrease in Germany due to contraction of cash-in following planned reduction of single premiums (€ m) 1H13 1H14 - Share of unit linked in total net inflow

  23. Slide 23: Life investment performance

    CFO – Life Insurance 23 Life investment performance Life segment general account investments (%) Euro 282.4 bn Euro 304.0 bn  Current return generally affected by reinvestment in a lower yield 1.9% 1.8% 2.0% Other environment 3.8% 3.3% 3.5% 4.3% 4.7% 8.9% Cash & cash 8.1% equivalent Real estate 35.

  24. Slide 24: Life new business analysis

    CFO – Life Insurance 24 Life new business analysis  Good development of APE (+8.6%) with progressions for both annual (+5.9%) and single premiums (+12.5%), boosted by strong unit linked production (+29.1%)  NBM improves (+6.2%pts. on homogeneous basis) thanks to the more favourable economic assump

  25. Slide 25: P&C key financial Indicators

    CFO – P&C Insurance 25 P&C key financial Indicators (€ m) 1H13 1H14 LFL D 2Q13 2Q14 LFL D Gross written premiums, of which: 11,476 11,169 -0.7% 4,921 4,753 -1.2% Primary Motor 4,693 4,516 +0.1% 1,896 1,815 +0.2% Primary Non Motor 6,405 6,306 -0.9% 2,830 2,737 -2.5% Combined ratio (%) 94.6% 92.8% -1.

  26. Slide 26: P&C Operating result by driver

    CFO – P&C Insurance 26 P&C Operating result by driver  Improving result reflecting better underlying underwriting margins +14.8% (€ m) 4 130 0 1,033 900 1H13 TECHNICAL MARGIN INVESTMENT RESULT OTHER 1H14 1H14 638 499 (104) 1H13 508 500 (108) D% +25.5% -0.0% -3.3% © Generali July 31, 2014 2014 First

  27. Slide 27: P&C gross written premiums trends

    CFO – P&C Insurance 27 P&C gross written premiums trends Overall stable premium development: (€ m) 1H13 1H14 LFL r  Decline in Italy primarily driven by Motor. Growth in Personal and Commercial lines offset by lower Italy 3,160 3,032 -4.0% premiums in Accident & Health  Decline in France driven by

  28. Slide 28: Combined ratio analysis

    CFO – P&C Insurance 28 Combined ratio analysis Current year loss ratio improved 1.1%pts. Expense ratio (%) - 0.4%pts. 27.5 27.1 Combined ratio (%) (0.1) 6.0 (0.3) 5.7 Administr. costs - 1.8%pts . 94.6 Acquisition 21.4 21.4 92.8 costs (0.4) Δ%pts (1.4) 27.5 27.1 1H13 Δ Admin Δ Acq. 1H14 Loss ratio (%

  29. Slide 29: Combined ratio by country

    CFO – P&C Insurance 29 Combined ratio by country COUNTRY 1H13 1H14 ∆  Combined Ratio still improving in Italy, despite Nat Cat impact (+1.0%pts.) Italy 91.3% 88.1% -3.2%pts.  Combined Ratio in France strongly impacted by Nat Cat (3.6%pts. compared France 99.3% 105.1% +5.9%pts. to 0.7%pts. in 1H13)

  30. Slide 30: P&C investment performance

    CFO – P&C Insurance 30 P&C investment performance P&C segment general account investments (%) Euro 37.7 bn Euro 39.1 bn 1.1% 1.4% 10.0% 9.1%  Higher current fixed income yield thanks to higher exposure to 13.1% 12.5% Other corporate bonds 10.2% Cash & cash 9.9% equivalent 6.5% 9.1% Real estate Equi

  31. Slide 31: Financial segment key financial indicators

    CFO – Financial Segment 31 Financial segment key financial indicators(1) 1H13 1H14 LFL D 2Q13 2Q14 LFL D Operating result (€ m) 195 226 +15.8% 113 119 +5.9% Net fees and commissions (€ m) 237 251 +6.0% 118 133 +12.4% Cost / income ratio (%) 49.7% 47.3% -2.4%pts. 46.2% 47.2% +1%pts. Third party AUM(2

  32. Slide 32: Final remarks

    CFO – Final remarks 32 Final remarks  Solvency I above target levels, and highest level in recent years  Further strong improvement of underlying P&C underwriting margins  Good momentum of Life volumes, with improving mix; Good operational performance despite low yields © Generali July 31, 2014 2

  33. Slide 33: IV. Backup

    33 Agenda IV. Backup - Investments Page 34 - Financial debt Page 40 - Life Page 44 - Definitions Page 46 © Generali July 31, 2014 2014 First Half Results

  34. Slide 34: IV. Backup

    34 Agenda IV. Backup - Investments Page 34 - Financial debt Page 40 - Life Page 44 - Definitions Page 46 © Generali July 31, 2014 2014 First Half Results

  35. Slide 35: Assets under management

    Investments 35 Assets under management Total portfolio € 450 bn Breakdown by region and asset class Italy 4% By Region France 3% 10% 31% Germany CEE 29% General account EMEA investments 9% 23% RoW and other 14% operations Unit Linked 1% 77% 3% 5% Third party 4% Equity investments Fixed income Real e

  36. Slide 36: Fixed Income Portfolio

    Investments 36 Fixed Income Portfolio Total Portfolio € 302 bn Covered € 32 bn Corporate € 89 bn Government € 150 bn (1) 1% 1% 2% 0% 2% 10.5% 7% 5% 14% 8% 8% 10% 10.6% 12% 16.6% 47% 69% 38% 34% 39% 12.8% Other fixed Income 3% Covered AAA AA A BBB Not Investment Grade Not Rated Corporate non fin. 49.

  37. Slide 37: Focus on Government Bonds

    Investments 37 Focus on Government Bonds Exposure by country Government bonds € 150 bn Italy France Germany CEE RoE RoW Supranational 3% 7% 19% 39% 6% 6% 20% Exposure to Italian Government Bonds (1) (€ bn) 58.5  Italian government bond exposure decreased by 4% since 2012-end, despite 56.2 market ap

  38. Slide 38: Equity & Equity-like

    Investments 38 Equity & Equity-like Total portfolio (€ 17.5 bn) Alternative investments (€ 2.9 bn) Equity (€ 11.0 bn) Life, P&C and Life, P&C and 1% 17% Financial Financial 25% 16% 16% 67% Life Life P&C 74% P&C Financial Financial 21% 63% 0% 15% 21% Listed and Unlisted Life, P&C and Financial Equity

  39. Slide 39: Asset Allocation: Real Estate

    Investments 39 Asset Allocation: Real Estate (1) Total portfolio (€ 24.6 bn (1)) 3% Breakdown by use (2) 6% 11% Office Retail 15% Residential Breakdown by utilization (2) 65% Logistics 15% Other/Mixed Investment properties 1% Breakdown by country (2) Own use 85% 19% Italy 2% France 37% Germany 16% C

  40. Slide 40: IV. Backup

    40 Agenda IV. Backup - Investments Page 34 - Financial debt Page 40 - Life Page 44 - Definitions Page 46 © Generali July 31, 2014 2014 First Half Results

  41. Slide 41: Debt refinancing operations completed

    Financial debt 41 Debt refinancing operations completed Financing until 2016 call dates completed; € 1 bn net reduction in debt levels by end 2015 (€ bn) 1.3 1.0 12.8 12.9 12.2 (0.5) 11.7 (1.5) (0.8) (0.5) FY13 SENIOR BOND REPAYMENT SUB DEBT SENIOR DEBT 1H14 NOVEMBER EXPECTED 2015 EXPECTED ISSUED JA

  42. Slide 42: Focus on financial debt

    Financial debt 42 Focus on financial debt Total financial debt (€ m)(1) Average cost & maturity of financial debt (%)(1) € 12,758 m € 12,921 m 678 617 FY13 1H14 Average cost (%) 5.93% 5.72% 7,612 8,085 Subordinated/Hybrid 6.54% 6.42% Senior 4.81% 4.26% 4,468 4,218 Average maturity (years) 5.27 5.96

  43. Slide 43: Financial debt breakdown by expiry date/call date

    Financial debt 43 Financial debt breakdown by expiry date/call date (€ m) 2,618 2,154 1,750 1,437 1,268 1,250 750 770 500 250 2014 2015 2016 2017 2018 2019 2020 2022 2024 2026 Senior Hybrid Subordinated © Generali July 31, 2014 2014 First Half Results

  44. Slide 44: IV. Backup

    44 Agenda IV. Backup - Investments Page 34 - Financial debt Page 40 - Life Page 44 - Definitions Page 46 © Generali July 31, 2014 2014 First Half Results

  45. Slide 45: Life new business: APE

    Life Insurance 45 Life new business: APE (€ m) APE Annual Premium Single Premium 1H13 1H14 LFL r 1H13 1H14 LFL r 1H13 1H14 LFL r Italy 860 1,177 +36.9% 558 702 +25.8% 3,026 4,757 +57.2% France 409 425 +3.8% 168 162 -3.4% 2,415 2,625 +8.7% Germany 549 418 -28.0% 289 278 -9.0% 2,600 1,404 -49.0% CEE 8

  46. Slide 46: IV. Backup

    46 Agenda IV. Backup - Investments Page 34 - Financial debt Page 40 - Life Page 44 - Definitions Page 46 © Generali July 31, 2014 2014 First Half Results

  47. Slide 47: Definitions

    Definitions 47 Definitions Total Operating Result Total operating result represents earnings before taxes, gross of interest expense on liabilities linked to financing activit ies, specific net income from investments and non-recurring income and expenses Adjusted Shareholders’ Shareholders’ Equity

  48. Slide 48: Disclaimer

    48 Disclaimer Certain of the statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The user of such information should r

  49. Slide 49: Next events

    49 Next events 06.11.2014 9M 2014 results reporting 19.11.2014 2014 Investor Day 14.05.2015 12.03.2015 1Q 2015 results reporting FY 2014 results reporting 30.07.2015 1H 2015 results reporting 30.04.2015 Annual General Meeting 05.11.2015 9M 2015 results reporting 18.11.2015 2015 Investor Day © Genera

  50. Slide 50: Investor Relations team

    50 Team Spencer Horgan Marta Porczynska Head of Investor & Rating Agency Relations Team Assistant & Event Manager Spencer.Horgan@Generali.com Marta.Porczynska@Generali.com +44 20 7265 6480 +39 040 671402 Stefano Burrino Martina Vono Senior IR Manager Team Assistant & Event Manager Stefano.Burrino@Ge

  51. Slide 51: GENERALI GROUP 2014 First Half Results

    GENERALI GROUP 2014 First Half Results © Generali July 31, 2014 2014 First Half Results

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